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Date:28-09-19

Double the growth rate

Here are six doable, practical and quick ways to get to 10% GDP growth

Chetan Bhagat

A 10% GDP growth is the right benchmark for the current government, which is stable, not dependent on coalitions and in its second term. After all, if the more left-leaning UPA, with all its coalition compromises and scams could reach 8% GDP growth, it is reasonable to expect India to grow at 10% in the current regime, now in its sixth year.

However, we are currently only at around 5% growth. The reasons for this have been discussed threadbare in numerous articles. It is time now to focus on how to get that 10% growth. The recent big cuts in corporate taxes are a sure sign that the government now acknowledges this issue, and cares about growth.

There are longer term measures, such as investing heavily in infrastructure, which will ultimately deliver GDP growth. However, the focus of this article is relatively quicker, doable measures that can rapidly enhance our growth. Some of these measures do involve giving up control, which our politicians and bureaucrats don’t like. However, no major country has grown at 10% without ceding some control to the private sector. When you fly a kite, the thread helps you control it. However, if you want the kite to soar higher, sometimes you have to let the thread go loose.

India’s 2019 GDP is expected to be roughly $3 trillion (rounded for simplification). Since we are already at 5%, the additional 5% to reach 10% growth requires another $150 billion of economic activity per year. This amounts to around Rs 3,000 crore of extra economic activity per day over the entire country. Again, this is achievable. Here are six doable, practical and quick ways we can get that 10% growth.

Real estate – Real Estate drives a large amount of economic activity and consumer sentiment. For perhaps the first time in decades, real estate prices are stuck for the last 5 years. It can be fixed by massive stamp duty cuts (states will have to be reimbursed) and the government itself selling a fraction of its massive prime land holdings to generate revenue.

Agriculture – It is difficult to drive growth in India without growing agriculture. Most of the fixes here are long term, centring around infrastructure. However, one quick fix exists – legalising medical marijuana. Already a multi-billion dollar industry worldwide, cannabis is already part of India’s culture. As India is an agricultural country, we are missing out on a worldwide boom. Twenty years later, in line with the world we will probably legalise it anyway. Why not now? Of course, as with any drug like this, a careful regulatory policy has to be thought through.

Divestment – The government keeps talking divestment, but is often unable to meet targets as selling individual units takes a lot of time. A better way might be to consolidate, say, 20 PSUs into a fund or holding company called DivestCo. Then, sell the DivestCo shares at a significant discount to attract investors. Thereby, we sell all the companies at once and save a massive headache.

Customs – There is something wrong with the way Indian customs duty works. It is not so much the duty itself, as the delays imports and exports face at our airports and seaports that make the entire nation uncompetitive. If we want to grow at turbocharged pace, this bottleneck has to be fixed. A simple uniform customs duty maybe? Giving up the current inspection procedures? More work is required but this is definitely choking our growth.

Financial reforms – The lowering of corporate tax rates was a welcome move. Some more steps are still required. Long-term capital gains tax should be removed. The rupee must move towards full convertibility. Another huge move the government could consider is not taxing global income for residents, at least for the next ten years. The revenue loss from this will be limited (as one gets credit for foreign taxes paid anyway). However, it will attract much-needed global investors and firms, who are sitting on the sidelines right now, to incorporate themselves in India.

Investor Protection Bill – We have to realise investors invest based on projections. Imagine spreadsheets of financial models filled with assumptions on tax rates and other costs, going out ten years. When the government changes rates suddenly, the model goes awry. Investors hate that uncertainty. We need a law that essentially ensures no sudden, ad-hoc and frequent policy changes in taxation or regulations that might be adverse to Indian business.

The ideas above are relatively quick fixes to boost our GDP growth. Ultimately, we need longer term measures too to create a solid foundation for a growing economy. Infrastructure is the single biggest thing a government can do – better roads, ports, airports, cellphone networks, power and water availability. Indian infrastructure used to all be at Third World levels. Things have improved somewhat in the last two decades, but we still have a long way to go.

Ultimately, economic growth will be a big criterion when history will judge India’s current era. However disproportionate negative talk, excessive politicisation of the GDP number and a defeatist attitude will get us nowhere. Neither will too much control. Instead of headlines like ‘highest tax collections ever,’ we have to now aspire to headlines like ‘highest GDP growth ever!’ Stay positive, think strategically and do what it takes for 10% GDP growth, and it will happen. This is India’s time. Let’s do it!

Date:28-09-19

महिलाओं के लिए तोहफा होगा गर्भपात कानून में बदलाव

संपादकीय

भारत में मेडिकल टर्मिनेशन ऑफ प्रेग्नेंसी (एमटीपी) एक्ट 1971 के अंतर्गत 20 हफ्ते से ज्यादा हो जाने के बाद महिलाएं गर्भपात नहीं करवा सकती हैं। इसके लिए अदालत की अनुमति जरूरी होती है। सरकार इन दिनों 48 साल पुराने इस कानून में बदलाव की तैयारी कर रही है। देेश और दुनिया में बदली मेडिकल दुनिया उसके और ज्यादा आधुनिकीकरण और विकास के बीच गर्भपात का हक महिलाओं और उनके डॉक्टरों को न देकर अदालतों को देना शायद आधुनिक भारत की महिलाओं के साथ नाइंसाफी है। इसका औचित्य और ज्यादा बढ़ जाता है जब आज देश में हर साल 1.5 करोड़ महिलाएं छिपकर गर्भपात करवाने पर मजबूर हैं, जो लैंसेट की रिपोर्ट का आकंड़ा है। पिछले कुछ सालों में गर्भपात के कई मामले अदालतों तक पहुंचे। कुछ फैसलों ने वाह-वाही लूटी तो कुछ फैसलों से लोग निराश भी हुए। इसी वजह से इस कानून में संशोधन की मांग तेजी से उठ रही है और अगर बदलाव हो गया तो यह महिलाओं के लिए किसी अनमोल तोहफे से कम नहीं होगा। हाईकोर्ट की याचिका में महिला और उसके भ्रूण के स्वास्थ्य पर खतरे को देखते हुए गर्भपात कराने की अवधि 20 से बढ़ाकर 24 से 26 हफ्ते करने की मांग है। याचिका में अविवाहित महिलाओं और विधवाओं के गर्भपात का भी जिक्र है। ये वे महिलाएं हैं जिन्हें गर्भपात जैसा फैसला लेने और उसे अंजाम देने में सबसे ज्यादा मानसिक त्रासदी जैसी दिक्कतों का सामना करना पड़ता है। आसान तो शादीशुदा महिलाओं के लिए भी नहीं होता। गर्भपात सिर्फ शारीरिक नहीं मानसिक पीड़ा वाली प्रक्रिया है। छिपकर या फिर अच्छे स्वास्थ्य केंद्र के बाहर गर्भपात करवाने की वजह अलग-अलग हो सकती हैं, लेकिन खतरा सीधे महिला की जान को होता है। इसके बावजूद वह ऐसा करने पर मजबूर हैं क्योंकि उनके पास गर्भपात का अधिकार नहीं हैं। कानून से जुड़ी एक पेचीदगी यह भी है कि महिला को गर्भपात न कराने से तो रोक दिया जाता है, लेकिन यदि उसका बच्चा स्वस्थ पैदा नहीं होता तो मां को जीवनभर होने वाली समस्याओं की सुध कोई नहीं लेता, न कानून, न डॉक्टर और न गर्भपात पर नाक-भौं सिकोड़ने वाला समाज। इसलिए अगर महिला को गर्भवती होने का अधिकार है, तो गर्भपात करवाना है या नहीं इसका भी अधिकार महिला के ही पास होना चाहिए।

Date:28-09-19

वैश्विक भूमिका में भारत

सयुंक्त राष्ट महासभा के वार्षिक अधिवेशन में भारतीय प्रधानमंत्री के संबोधन से यही स्पष्ट हुआ की भारत अपनी वैश्विक भूमिका बढ़ाने के लिए पूरी तरह तैयार और तत्पर है।

संपादकीय

यह अच्छा हुआ कि संयुक्त राष्ट्र महासभा के 74वें अधिवेशन को संबोधित करते हुए भारतीय प्रधानमंत्री नरेंद्र मोदी ने न तो कश्मीर का जिक्र करना जरूरी समझा और न ही सीधे तौर पर पाकिस्तान का नाम लेना, लेकिन उन्होंने आतंकवाद के खिलाफ एकजुट होने की जरूरत को रेखांकित कर परोक्ष तौर पर यह भी स्पष्ट कर दिया कि वह आतंक के निर्यातक इस पड़ोसी देश की घेराबंदी करना जारी रखेंगे। उन्होंने आतंकवाद के खिलाफ भारत की गंभीरता और आक्रोश को व्यक्त करने के साथ ही विश्व समुदाय को इसके लिए आगाह भी किया कि उसका बिखराव उस खतरे को बढ़ाने का ही काम करेगा, जो मानवता के साथ-साथ उन सिद्धांतों के लिए भी चुनौती बन गया है जिनकी रक्षा के लिए संयुक्त राष्ट्र का गठन किया गया। भारतीय प्रधानमंत्री ने आतंकवाद के साथ ही दूसरी सबसे बड़ी चुनौती बिगड़ते पर्यावरण की ओर दुनिया का न केवल ध्यान खींचा, बल्कि प्राकृतिक आपदाओं से मिलकर निपटने की आवश्यकता पर भी बल दिया। इस सिलसिले में उन्होंने वैश्विक सहयोग की एक रूप रेखा भी खींची। यह ठीक वैसी ही पहल है जैसी भारत के नेतृत्व में अंतरराष्ट्रीय सौर गठबंधन के रूप में सामने आ चुकी है। इसके जरिये भारत ने ग्लोबल वार्मिंग से निपटने के मामले में दुनिया के सामने जो उदाहरण पेश किया है उसकी कोई अनदेखी नहीं कर सकता।

भारतीय प्रधानमंत्री ने भारतीय लोकतंत्र की महिमा का बखान करते हुए आम आदमी की जिंदगी को बदलने वाली अपनी कई सफल योजनाओं का केवल जिक्र भर नहीं किया, बल्कि यह भी बताया कि भारत निर्धनता का मुकाबला करने के लिए हर संभव कोशिश कर रहा है और इस संदर्भ में वह दुनिया से सीख लेने और साथ ही उसे दिशा दिखाने के लिए भी तत्पर है। उन्होंने विश्व में शांति एवं सद्भाव की जरूरत पर जोर देते हुए जिस तरह यह कहा कि हम उस देश के वासी हैैं जिसने दुनिया को युद्ध नहीं, बुद्ध दिए उससे यही रेखांकित हुआ कि वह संयुक्त राष्ट्र के मंच का उपयोग विश्व राजनेता के रूप में कर रहे थे। वास्तव में यही समय की मांग भी थी। संयुक्त राष्ट्र महासभा के सालाना अधिवेशन में भारतीय प्रधानमंत्री के संबोधन से यही स्पष्ट हुआ कि भारत अपनी वैश्विक भूमिका बढ़ाने के लिए न केवल तत्पर है, बल्कि हर चुनौतियों का सामना करने के लिए तैयार भी है। यह देखना दयनीय रहा कि जिस मंच से भारतीय प्रधानमंत्री ने सारी दुनिया के हितों की चिंता की तब पाकिस्तानी प्रधानमंत्री इमरान खान अपना पुराना राग अलापते नजर आए। ऐसा करके उन्होंने एक बार फिर दुनिया को अपनी संकीर्ण सोच से ही परिचित कराया।

Date:28-09-19

निर्यात और विदेशी बाजार

टी. एन. नाइनन

घरेलू मांग में कमी आने पर प्रतिस्पर्धी अर्थव्यवस्थाएं निर्यात बाजारों की ओर रुख करती हैं। तेज गति से विकास करने वाला हर देश सफल निर्यातक होता है। हाल के वर्षों में देश में जो मंदी आई है उसकी बुनियादी वजहों में से एक है निर्यात को गति प्रदान करने में नाकामी। जीडीपी के संदर्भ में निर्यात में तेजी से गिरावट आई है। निर्यात को गति दिए बिना अर्थव्यवस्था मंदी से नहीं उबर सकती। सारी बातचीत आयात प्रतिस्थापन और शुल्क दरों में इजाफा करने के इर्दगिर्द केंद्रित है।

शंकालुओं का कहना है कि वैश्विक स्तर पर कारोबार मंदा है, ऐसे में निर्यात के प्रति जोश जगाना मुश्किल है। परंतु हमारे देश में वस्त्र व्यापार भी स्थिर है। जबकि वियतनाम, इंडोनेशिया और कंबोडिया में तेज निर्यात वृद्घि देखने को मिली है। बांग्लादेश भी भारत से आगे है। इसकी वजह यह है कि ये देश चीन की कमी पूरी कर रहे हैं। चीन हर महीने 20 अरब डॉलर मूल्य के वस्त्र निर्यात करता था जो अब घटकर 12 अरब डॉलर रह गया है (भारत को यह आंकड़ा पाने में नौ महीने लगते)। इस कमी को पूर्वी एशिया के देश और बांग्लादेश पूरा कर रहे हैं। भारत के पास इसका बहुत मामूली हिस्सा आया है। बांग्लादेश का निर्यात भारत के निर्यात का 60 फीसदी हुआ करघरेलू मांग में कमी आने पर प्रतिस्पर्धी अर्थव्यवस्थाएं निर्यात बाजारों की ओर रुख करती हैं। तेज गति से विकास करने वाला हर देश सफल निर्यातक होता है। हाल के वर्षों में देश में जो मंदी आई है उसकी बुनियादी वजहों में से एक है निर्यात को गति प्रदान करने में नाकामी। जीडीपी के संदर्भ में निर्यात में तेजी से गिरावट आई है। निर्यात को गति दिए बिना अर्थव्यवस्था मंदी से नहीं उबर सकती। सारी बातचीत आयात प्रतिस्थापन और शुल्क दरों में इजाफा करने के इर्दगिर्द केंद्रित है। शंकालुओं का कहना है कि वैश्विक स्तर पर कारोबार मंदा है, ऐसे में निर्यात के प्रति जोश जगाना मुश्किल है। परंतु हमारे देश में वस्त्र व्यापार भी स्थिर है। जबकि वियतनाम, इंडोनेशिया और कंबोडिया में तेज निर्यात वृद्घि देखने को मिली है।बांग्लादेश भी भारत से आगे है। इसकी वजह यह है कि ये देश चीन की कमी पूरी कर रहे हैं। चीन हर महीने 20 अरब डॉलर मूल्य के वस्त्र निर्यात करता था जो अब घटकर 12 अरब डॉलर रह गया है (भारत को यह आंकड़ा पाने में नौ महीने लगते)। इस कमी को पूर्वी एशिया के देश और बांग्लादेश पूरा कर रहे हैं। भारत के पास इसका बहुत मामूली हिस्सा आया है। बांग्लादेश का निर्यात भारत के निर्यात का 60 फीसदी हुआ करता था लेकिन अब यह उलट कर दोगुना हो चुका है। वियतनाम भी हमसे काफी आगे हो गया है। विडंबना यह है कि बांग्लादेश कपास, धागा और कपड़ा भारत से आयात करता है। वस्त्र निर्यात, व्यापार घाटे को कम करता है, साथ ही कई जटिल समस्याओं को भी हल करता है। किसी भी अन्य बड़े औद्योगिक क्षेत्र की तुलना में यह रोजगार को अधिक बढ़ावा देता है। वाहन या इंजीनियरिंग क्षेत्र की तुलना में यह 10 गुना तक और रसायन तथा पेट्रोकेमिकल क्षेत्र की तुलना में 100 गुना अधिक रोजगार प्रदान करता है। इस उद्योग की बिक्री का काफी हिस्सा वेतन-भत्तों में जाता है जो घरेलू खपत की मांग को बढ़ावा देता है। इस क्षेत्र के अधिकांश कर्मी महिलाएं हैं जिनकी श्रम शक्ति में कम होती भागीदारी चिंता का विषय बन चुकी है। चूंकि कपड़ा एवं वस्त्र क्षेत्र पहले ही कुल विनिर्माण रोजगार के एक तिहाई के बराबर है इसलिए वस्त्र निर्यात को बढ़ावा देने मात्र से विनिर्माण को जबरदस्त गति मिलेगी। अभी भी अवसर समाप्त नहीं हुआ है क्योंकि चीन के निर्यातकों को अमेरिकी शुल्क वृद्घि (अभी वस्त्र क्षेत्र पर लागू नहीं) के खतरे के अलावा बढ़ती लागत और घटते मार्जिन से जूझना पड़ रहा है। भारत की सबसे बड़ी दिक्कत समुचित परिस्थितियों का अभाव है। बांग्लादेश अत्यंत कम विकसित देश है और उसे यूरोप, कनाडा और जापान के बाजारों में शुल्क मुक्त पहुंच हासिल है। वियतनाम और श्रीलंका को भी मुक्त व्यापार समझौतों के तहत यूरोप में ऐसी पहुंच प्राप्त है। यूरोप में बांग्लादेश की शुल्क मुक्त पहुंच 2024 में समाप्त हो जाएगी लेकिन वह मुक्त व्यापार समझौते पर हस्ताक्षर कर सकता है। अत्यंत कम मार्जिन वाले कारोबार में शुल्क दर में 10 फीसदी की बाधा से बहुत बड़ी दिक्कत हो सकती है। भारत ने यूरोपीय संघ के साथ व्यापार को संतुलित किया है लेकिन जापानी कार कंपनियों की लॉबीइंग के चलते भारत मुक्त व्यापार समझौता नहीं कर सका है। सरकार ने श्रम कानूनों में बदलाव किया है और भविष्य निधि खातों में योगदान के जरिये भी उसने बांग्लादेश के साथ वेतन का अंतर कम किया है। नई विनिर्माण इकाइयों के लिए 17 फीसदी की कर दर की पेशकश के साथ यह अंतर और कम हुआ है। परंतु निर्यातकों को कमजोर बुनियादी सुविधाओं और बंदरगाहों पर समय खपाऊ प्रक्रिया से भी गुजरना पड़ रहा है। रुपये के अधिमूल्यन में सुधार भी उतना ही अहम है।

वाणिज्य मंत्री पीयूष गोयल ने एक साक्षात्कार में कहा है कि वह यह नहीं समझ पा रहे कि सस्ता रुपया कैसे मददगार होगा जबकि देश का व्यापार घाटा खासा बढ़ा हुआ है। उन्हें यह भी देखना चाहिए कि सन 1996 में रुपये के अवमूल्यन के बाद व्यापार के आंकड़ों में समय के साथ सुधार आया जबकि आयात कम हुआ। चार वर्ष में भारी भरकम व्यापार घाटा 80 फीसदी तक पूरा हो गया था। सन 1991 के अवमूल्यन के पहले पांच वर्ष का औसत व्यापार घाटा निर्यात का 40 फीसदी था लेकिन अवमूल्यन के बाद इसमें गिरावट आई और तकरीबन दशक भर तक यह काफी कम बना रहा। आज उतनी तीव्र गिरावट संभव नहीं है क्योंकि अमेरिका उन देशों पर नजर रखता है जिनके बारे में उसे लगता है कि वे मुद्रा दर के साथ छेड़छाड़ करते हैं। परंतु इससे निपटने के और भी तरीके हैं। निर्यात वृद्घि जल्द हासिल करने के लिए रुपये का तत्काल अवमूल्यन आवश्यक है।

Date:27-09-19

Childhoods lost in a troubled paradise

Kashmir’s children grow up traumatised by conflict and live in perpetual fear of being picked up by the state

Anna Mathew , R. Vaigai , Devika S. , (advocates at Madras High Court)

Every third child in Shopian district, Jammu and Kashmir (J&K), has a clinically diagnosable mental disorder, said a survey published in the Community Mental Health Journal earlier this year. Around 1.8 million adults in Kashmir Valley — 45% of its population — showed symptoms of mental illness in 2015, according to Doctors Without Borders. Thus, even prior to the incidents of August 5, the disastrous results of a history of violence, illegal detentions and torture in the Valley were visible on the region’s children.

The horror has since continued and got magnified, as chronicled in many reports. Media has reported illegal detention of scores of children, many of them whisked away at midnight by law enforcement officers with no record of their arrests, making it difficult to trace them. A report by economist Jean Dreze in August detailed illegal detention and torture of boys. A recent report by the Indian Federation of Indian Women and other organisations gave a first-hand account of the haunting spectre of mothers standing at their doorsteps in the desperate hope of their children’s return, not knowing where they are. These disappearances are in clear breach of the Supreme Court’s directions in the D.K. Basu case, where the court said that the next of kin have to be informed of every such arrest and the reasons thereof.

Pawns in a political game
Kashmir’s children have become pawns in a political game where the government wants to punish those protesting against its authority. Between 1990 and 2005, a total of 46 schools were occupied by the armed forces and more than 400 schools gutted between 1990 and 2005, according to a 2006 report of the Public Commission on Human Rights. Such destruction of educational infrastructure, in addition to the unlawful detentions, leaves a lifelong impact on children, perpetuating a cycle of trauma, fear and bitterness.

A report by the UN High Commissioner for Human Rights earlier this year found that children in Kashmir, many of whose ages were wrongly recorded, were being detained and mistreated for several days in police lock-up, without any charge, mostly under the Public Safety Act (PSA), which allows preventive detention for up to two years without any trial. The report found that the Armed Forces Special Powers Act remained a key obstacle to accountability.

In 2018, the Jammu & Kashmir Coalition of Civil Society (JKCCS) found through Right to Information applications that hundreds of children had been detained under the PSA between 1990 and 2013. In many of these cases, the police/magistrates had no procedure to verify the age of the detainees and minors were kept in custody along with adult criminals and released only after judicial intervention. About 80% of these detentions were held illegal by courts.

Such treatment of children is undoubtedly in violation of multiple laws and conventions. To begin with, all of them violate Article 14(4) of the International Convention on Civil & Political rights which states that “all proceedings against juveniles shall take into account their age and the desirability of promoting their rehabilitation.” The UN Convention on the Rights of the Child, ratified by India, provides that the arrest/detention of a child shall be in conformity with the law and used only as a last resort and for the shortest appropriate period. The guidelines of the National Commission for Protection of Child Rights clearly state that a blanket characterisation of adolescent boys as security threats during civil unrest should be avoided and authorities should investigate and take action against personnel involved in arbitrary detentions, mistreatment or torture of children.

A sledgehammer treatment
In 2003, the Madras High Court in Prabhakaran v. State of Tamil Nadu held that the Juvenile Justice Act is a comprehensive law and overrides preventive detention laws enacted for national security. Earlier, in 1982, the Supreme Court had in the Jaya Mala case condemned the preventive detention of a student and observed that young people, even if their acts are misguided, cannot be punished with a sledgehammer.

However, none of these laws and directives seem to be followed in Kashmir. Parents are now too scared to send their children to school, lest they be picked up by authorities or get caught in a crossfire. When such disappearances take place in a conflict-torn region, who does the aggrieved party complain to? Courts seem to be the only forums offering some promise of redressal. However, state actions since August 5, when J&K’s special status was abrogated, have taken away even this limited option from Kashmiris. Following the arrest of presidents of the J&K High Court and District Bar Associations and senior lawyers under PSA, most of Kashmir’s 1,050 lawyers have been on strike. Over 200 habeas corpus petitions have been filed till now. However, since most post offices are closed, lawyers are unable to serve notices on the respondents.

On August 5, all 31 cases shown in the ‘orders list’ of the Srinagar Bench of the J&K High Court were adjourned “due to restrictions on movement of traffic” as advocates could not be present. Weeks later, on September 24, out of the 78 uploaded cases, advocates were present for both parties in just 11, none appeared in nine cases, petitioner’s counsel alone in nine cases and only the government counsel in 47 cases.

Anticipating such contingencies, our Constitution provided for the protection of the citizens’ fundamental rights by empowering them to approach the Supreme Court directly in case the rights were violated. The right to constitutional remedies is by itself a fundamental right. Quite conscious of its obligations to protect the right to life of Kashmiris, the apex court has thus taken upon itself the task of inquiring into the allegations of state violence against children.

The observations made by the Inter American Court of Human Rights had observed in a 2005 case, concerning Colombia’s Mapiripán Massacre, are instructive here: “One does not combat terror with terror, but rather within the framework of the law. Those who resort to the use of brute force brutalise themselves, creating a spiral of widespread violence that ends up turning the innocent, including children, into victims.”

Noting that the terror sown among the surviving inhabitants caused their forced displacement, the court observed that the omissions, tolerance and collaboration by the state and the general population amounted to aggravated human rights violations in the name of ‘war on terror’.

Caged and disturbed
Children in Kashmir grow up caged and under the shadow of a gun. As the parents of many of them go missing, they are also forced to assume the responsibility of caregivers for their siblings. The strain on social structures due to the loss of family environment, safe spaces and education and health facilities severely traumatises many of them and snatches their childhood away. Gowhar Geelani, in his recent book Kashmir Rage and Reason says children in Kashmir learn terms like “custody killing”; “catch and kill”; “torture”; “interrogation”; “detention”; and “disappearance” — internalising a vocabulary they should not be privy to otherwise.

What kind of world can such children look forward to if they have to live in constant fear of being picked up for an unknown crime and taken to an unknown destination? Surely, this is not the firdous (heaven) on earth that many visualise Kashmir to be?

No curbs on democratic rights on the promise of development can justify inhumane treatment of children. We need to speak out for the children of Kashmir or we will also be complicit in the ‘aggravated crime’ by the state apparatus. The preventive arrests should be stopped lest the children of Kashmir go missing forever.

Date:27-09-19

Institutions weakened, economy crippled

The credibility of the RBI, the CSO and the Niti Aayog has taken a beating in recent times due to political interference

M. Suresh Babu (is a Professor at IIT-Madras)

Nobel laureate Oliver Williamson pondered over an important question, around 25 years ago: “Why are the ambitions of economic development practitioners and reformers so often disappointed?” According to him, “one answer is that development policymakers and reformers are congenital optimists. Another answer is that good plans are regularly defeated by those who occupy strategic positions. An intermediate answer is that institutions are important, yet are persistently neglected in the planning process.”

The question and all the three answers assume relevance in the context of India’s recent economic performance. The slowdown in GDP growth rate has been dissected, digressed and disowned by analysts, commentators and policymakers. However, the diagnosis is far from complete and the growth engine is running out of fuel. Both the demand- and supply-side factors have been central in all the analyses, but the crucial role of institutions in shaping the outcomes of both the factors in this episode of slowdown has been neglected. This has resulted in a series of banal policy measures for reviving growth.

A market-centred economic model necessitates creating and sustaining credible institutions that further the efficiency of market mechanism. Given the possibility of ‘market failures’, such institutions assume a larger role in the economy in shaping expectations and decisions. Journalist Henry Hazlitt grouped the pillars of market economy into private property, free markets, competition, division and combination of labour and social cooperation. Institutions are needed to strengthen these foundational pillars are a prerequisite for markets to work. The credibility of three such important institutions — the Reserve Bank of India (RBI); the Central Statistical Organisation (CSO); and the Planning Commission/NITI Aayog — has taken a beating in recent times.

Erosion in RBI’s autonomy
The RBI, which was clamouring for more autonomy, has been systematically brought under the ambit of the Central government. Starting from the sidelining of the central bank on the important issue of currency demonetisation, the attempt has been to steadily erode the central bank’s independence. A three-pronged strategy resulted in this — first, the RBI was bypassed on matters relating to currency; second, its role as regulator of the banking sector was questioned when banks faltered; and, finally, its reserves were siphoned. The net result has been that the RBI has been reduced into an institution which presides over a limited space of monetary policy, that is, inflation targeting.

It is also interesting to note that the only major policy tool available in the RBI’s armoury is cutting repo rates, which the central bank did four times this year. The last time the RBI made so many back-to-back cuts was after the global financial crisis over a decade ago, when most major central banks were desperate to revive economic growth. However, rate cuts alone could not help India’s economy this time, as banks, saddled with bad debt, were slow to reduce lending rates. This provides a classic case of an institution’s weakening, leading to questions on its role and credibility.

Markets, which work on information and expectations, rely on official data to arrive at decisions. In an era of ‘big data’, we find that India’s official data procuring and publishing agency has been crippled. Often we find that the official series, ranging from national accounts to unemployment, has been smothered with repeated revisions and change of data definitions. When data that needs ‘approval’ before release, as in the case of the unemployment data, questions are bound to arise on the credibility of the numbers. The veracity of the data is to be tested by researchers and the public who consume the data and not by ‘approving agencies’. It is altogether another matter that had we had admitted that the rate of unemployment was high, perhaps more private investment could have come due the expectations of finding labour at lower wages. Such a possibility was shut out by an attitude of denial on the part of the government.

Space for course correction
NITI Aayog presents the case of an institution that lost its character in the process of transformation. By abolishing the erstwhile Planning Commission and transforming it into the NITI Aayog, the government lost the space for mid-term appraisals of plans and policies. Course correction and taking stock of the economy have now become routine exercises, with uncritical acceptance due to a lack of well-researched documents.

As another Nobel laureate, Douglass North, opined: “Institutions are the rules of the game in a society or, more formally, are the humanly devised constraints that shape human interaction.” Institutions are formed to reduce uncertainty in human exchange. Together with the technology employed, they determine the costs of transacting (and producing). While the formal rules can be changed overnight, as has been practised by the present government, the informal norms change only gradually.

In this context, it is useful to focus on understanding and reforming the forces that keep bad institutions in place, especially political institutions and the distribution of political power. This requires understanding the complex relationship between political institutions and the political equilibrium. Sometimes, changing the political institutions may be insufficient, or even counterproductive, in leading to better economic outcomes as has been the case in India in recent times. The use of high-quality academic information, which the present establishment lacks, is valuable both to think about these issues and generate better policy advice.

Date:27-09-19

Subject to people’s will

Disqualified rebels should not be barred from bypolls in Karnataka

Editorial 

With the Election Commission of India agreeing to defer byelections to 15 of the 17 vacant Assembly seats in Karnataka, the defectors from the Congress and JD(S) have got a breather. By the dint of this order, the question whether they can contest the elections will be answered by the Supreme Court before the bypolls. The rebel former legislators of the Congress and Janata Dal (Secular) had earlier this year resigned from the Assembly and were later disqualified by the then Speaker Ramesh Kumar. Following these actions, the BJP managed to get to power with the support of 105 of the 208 remaining legislators in the Assembly. The then Speaker’s actions disqualifying the legislators who had resigned till the end of the current term of the Assembly added a twist to the tale. This sent the fate of these disqualified legislators into a limbo, as it made it unclear whether they can contest following this ruling. Under the law (the Tenth schedule) though, it is not clear as to how the ex-Speaker could fix a period till which a member can remain disqualified and bar them for the rest of the assembly term. It is evident that the disqualified legislators should not be disallowed by the Supreme Court from contesting in the byelections for the seats.

However, the actions by the rebel legislators and the Speaker, cumulatively beg the question if the letter and spirit of the anti-defection law were undermined. It was clear that the legislators who quit the Congress-JD(S) coalition did so to curry favour with the BJP and to gain new loaves of power in the form of ministerial berths. The fact that the BJP government led by B. S. Yediyurappa has kept portfolios vacant in its council of ministers indicates that these seats have been kept warm for the turncoats. On the other hand, the Congress-JD(S) rigmarole of locking up legislators in resorts and hotels before trust votes, besides the machinations by the Speaker — sitting on the resignations for a long period and coming up with an unusual disqualification order — did not help matters. The fractiousness of the coalition had already led to a stasis in governance and had contributed to its loss in the Lok Sabha election and it is no wonder that the Congress and the JD(S) have decided to contest the byelections on their own. Besides deciding the future of the BJP government, which has a narrow margin of support in the Assembly, the byelections provide a good opportunity for voters of these constituencies to judge the parties and their representatives for their respective roles in the sordid drama this year. It is the people’s reasoned will that could ultimately bring a change in the political culture rather than just the implementation of the anti-defection law to regulate legislator behaviour.